Amazon Seller Central Inventory Management – Full Guide for 2025
Inventory is the backbone of any successful Amazon business. Proper inventory management affects every major metric – sales, costs, customer satisfaction, and account health. Poor inventory control can lead to stockouts, wasted storage fees, lower ranking, and lost customers. In this full guide for 2025, Infobeam Solution walks you through everything you need to know to master Amazon inventory management.
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Table of contents
- Amazon Seller Central Inventory Management – Full Guide for 2025
- 1. Why Inventory Management Matters More than Ever in 2025
- 2. Understanding Key Inventory Models: FBA vs FBM vs Hybrid
- 3. Forecasting Demand & Setting Reorder Points
- 4. Organizing SKUs & Segmenting Inventory
- 5. Storage Efficiency & Avoiding Costs
- 6. Inventory Tracking & Reconciliation
- 7. Automation & Tools for Efficient Management
- 8. Best Practices to Avoid Stockouts & Overstocks
- 9. Metrics & KPIs You Should Monitor
- 10. Putting It All Together: Workflow & Standard Operating Procedures (SOPs)
- FAQs – Amazon Inventory Management
- Final Thoughts
- Related Posts
1. Why Inventory Management Matters More than Ever in 2025
- Amazon’s algorithm favors consistent stock levels and penalizes listing suppression due to stockouts.
- Storage fees (including long-term storage) are increasing, especially for slow movers.
- Consumer expectations for fast delivery require ready-to-ship inventory, especially for Prime or Express SKUs.
- Global supply chain volatility (shipping delays, customs, raw material issues) demands better buffer planning.
2. Understanding Key Inventory Models: FBA vs FBM vs Hybrid
| Model | Pros | Cons |
|---|---|---|
| FBA (Fulfillment by Amazon) | Prime eligibility, fast shipping, reduced logistics burden | Storage & fulfillment fees, inbound shipping costs, long-term storage charges |
| FBM (Seller-fulfilled) | More control over shipping, possibly lower costs for heavy or unusual items | You handle packing, shipping; longer delivery times; less Buy Box advantage |
| Hybrid | Choose what’s best per SKU – optimize costs & experience | More complexity in stock tracking and operations management |
Selecting the right model per product is a key decision in optimizing margins and customer satisfaction.
3. Forecasting Demand & Setting Reorder Points
- Use historical sales, seasonality, promotions, and external trends to forecast demand.
- Account for lead time from suppliers (manufacture + shipping), internal processing, Amazon inbound delays.
- Define safety stock levels to buffer against sudden sales spikes or supplier delays.
- Monitor inventory turnover rate (how quickly stock sells) and Days of Inventory (how many days current stock will last).
4. Organizing SKUs & Segmenting Inventory
- Classify SKUs into “fast movers,” “moderate movers,” and “slow movers.”
- Prioritize fast movers – ensure they are always in prime status or well stocked.
- Consider phasing out or discounting slow movers to free up working capital and reduce storage fees.
- Use ABC or XYZ inventory classification to allocate resources efficiently.
5. Storage Efficiency & Avoiding Costs
- Review Amazon’s storage fee structure: monthly storage, long-term storage, and peak storage surcharges.
- Remove excess or dead inventory – remove, dispose, or liquidate.
- Consolidate shipments when possible to reduce freight and handling costs.
- Optimize packaging to reduce dimensions/weight and avoid hidden dimensional surcharges.
6. Inventory Tracking & Reconciliation
- Maintain accurate stock records in Seller Central and any external systems (ERP or inventory tools).
- Perform regular reconciliation of inbound shipments, returns, refunds, and lost/damaged inventory.
- Use Amazon’s Business Reports / Inventory Reports to track discrepancies.
- Monitor stranded inventory and address issues where inventory is not mapped or not sellable.
7. Automation & Tools for Efficient Management
- Use inventory management software or tools that integrate with Amazon Seller Central.
- Set up alerts/notifications for low stock, excess inventory aging.
- Automate replenishment workflows where possible.
- Use demand planning tools to model different scenarios (promotions, holidays, supply delays).
8. Best Practices to Avoid Stockouts & Overstocks
- Maintain minimum stock levels for critical SKUs.
- Schedule buffer stock before promotional events or holidays.
- Use “just-in-time” ordering for non-fast movers if supplier lead times are reliable.
- Review sales velocity weekly to adjust reorder points proactively.
9. Metrics & KPIs You Should Monitor
- Inventory Turnover Ratio
- Days of Inventory (DOI)
- Stockout Rate
- Excess & Dead Inventory Percentage
- Storage Fee per SKU
- Inbound Performance (delay from shipment to usable stock)
- Carrying Cost of Inventory
10. Putting It All Together: Workflow & Standard Operating Procedures (SOPs)
To maintain good inventory discipline, build workflows/SOPs around:
- Supplier order cycles & lead times
- Weekly stock review meetings
- Clearance / markdown strategy for slow SKUs
- Returns & damaged inventory processing
- Storage fee cost reviews monthly
FAQs – Amazon Inventory Management
It depends on your lead times and sales volatility. A common practice is 1.5× to 2× lead-time buffer for fast SKUs; less for moderate movers.
Weekly for fast movers, monthly for the rest. Anything older than 90–180 days should be assessed for discounting or removal.
Yes. Many sellers use external warehouses or 3PLs to pre-stage inventory, reduce inbound fees, or reduce lead times.
Remove or liquidate slow movers, move inventory into faster turnover status, optimize packaging (smaller footprint), and avoid over-stocking.
Stranded inventory is stock you own but is not available for sale due to listing issues, suppression, or fulfillment issues. Avoid it by regularly reviewing Inventory Health reports and fixing listing or SKU issues.
Final Thoughts
Effective inventory management is foundational to profitable Amazon selling. It’s not just about keeping stock – it’s about optimizing what you hold, when, and how. With solid forecasting, SKU segmentation, automation, penalty avoidance, and ongoing review, you can reduce your costs, improve customer satisfaction, and scale up smarter.